By Michael Copley
Powhatan Today Staff Writer

The country’s largest credit rating agency for local governments upgraded Powhatan’s credit rating following “extensive conversations” with county officials, Carolyn Bishop, County Administrator, told planning commissioners last week.

Standard and Poor’s moved Powhatan from the “A” to “AA” category; only a “AAA” designation is higher then the “AA-” rating the county just achieved.

“The results were based upon a recent review of the County in anticipation of a planned refinancing of selected County debt to take advantage of the currently lower interest rate environment. The refinancing will in turn produce annual debt service savings for the County,” according to a press release.

The credit rating is a measure of the county’s credit-worthiness, a scale that indicates how much money the county can borrow. Officials noted the improved rating helps save money “when [the county] goes to market. [The upgrade] could mean millions of dollars in savings over the life of a debt.”

Planning Commissioner Roger Richardson added, “Basically the rating means we are well-qualified buyers.”

The bond rating discussion is exhaustive, Bishop said, and includes considerations of the county’s economic development plan, community planning outlook and qualifications and resumes of the heads of county departments and elected officials.

Standard and Poor’s decision was reportedly based on several specific factors: ongoing economic development strategies and results; healthy property tax growth over several years; solid financial results including improved reserve fund levels; a moderate per capita debt; and, a manageable capital plan guided by well conceived, County imposed financial policy guidelines.

Bishop said Powhatan won’t likely qualify for a higher rating than “AA” in the foreseeable future because of the size of the county’s population; it’s too small to allow leaders to quickly raise the kind of money, through higher taxes, that would qualify the Powhatan for a “AAA” rating. For perspective, Bishop said the City of Richmond had a “AAA” rating before it was downgraded recently to “AA.”

Kyle Laux, Vice President of Davenport & Company, said elevation to the “AA” rating category, “puts Powhatan at a level where less than 1 in 5 Virginia Cities or Counties are ranked. This is clearly a very high level for Powhatan. ”

According to the press release, Stephanie Davis, County Finance Director, said the increased rating will have a significant impact on the County’s ability to borrow long term capital monies at even lower rates in the future.  “Going forward this upgrade could lower our debt service on new projects by an amount that is easily in the six-figure range annually.”

The press release also quoted David Rose, Senior Vice President and Manager of Public Finance at Davenport & Company: “In this economic environment, the way in which governing bodies and their staff conduct their business is key… [this upgrade] underscores the National Credit Rating Agency’s confidence in Powhatan County’s leadership…The rating upgrade reflects more than just a moment in time review.”

Bishop said the upgraded credit rating will save every resident of the county money. “Your county is doing well,” she said. “Locations are going down in the bond-rating world, it’s good to see Powhatan is going up.”